Hottest links for Friday, February 21st, the late edition. Get our free daily newsletter and never miss a single linkfest. Also, now if you sign up you will get our new e-book on value investing.
Top stories for today are included below. To finish off your workweek, we’ve got some great stories, like busted Chinese bank loans hitting 2008 levels, a breakdown of the math behind Facebook’s big deal, and how to find relatively safe stocks amid emerging market turmoil.
Hottest Links: Stories
Value Investing
The Last Word On Oil Trader Andy Hall and Life On the Right Hand Side of the Distribution
As I previously wrote on this blog, one of my professors at Yale, Ian Ayres, asked his class on empirical law and economics if we could think of any issue on which we had changed our mind because of an empirical study. [Climateer Investing]
Weight Watchers (WTW): Notes PDF
A lot of people emailed me about Weight Watchers International, Inc. (NYSE:WTW) after the company reported earnings and the stock dropped about 25% last week. Some of the people asking about Weight Watchers were subscribers to The Avid Hog. [Geoff Gannon, Gannon and Hoang on Investing]
What Caused the Great Financial Crisis?
I still see a good deal of confusion and debate over the cause of the great financial crisis. To me, this is a crucial understanding because we can’t analyze the disease and study its potential cures if we can’t even identify the causes. Here’s me view of things: [Cullen Roche, Pragmatic Capitalism]
Funds
Investing in community banks with TPS
Just as one needs to be mindful of Preferred Securities in a company’s capital structure, one should also be mindful of Trust Preferred Securities (TPS) which also have payment preference rights in a community bank’s capital structure. [Under The Rock Stocks]
He’s back: The best hedge fund of 2013 was…
After steep losses in 2011 and 2012, $21 billion Paulson & Co. was named hedge fund firm of the year at the 2013 Absolute Return Awards in New York City Tuesday night. [Lawrence Delevingne, NetNet]
Busted Chinese Bank Loans Hit 2008 Levels
Depending on whom you believe, China is either on the verge of economic utopia or economic disaster. Unfortunately, the data is leaning toward the latter. [ETF Guide, Alpha Now]
A Debate Brews as ETFs Gain on Index Mutual Funds
Investors like to argue about which is better, so-called “passively” managed funds or “actively” managed ones. But among indexing enthusiasts, an even bigger debate might be brewing. [Murray Coleman, MoneyBeat]
Finra Wants to Get Too Invasive for Some Members
The Financial Industry Regulatory Authority Inc. is used to criticism. Too weak a regulator is the most common scolding, particularly from investor advocates who demand Wall Street’s self-regulator of all things brokerage to be tougher on brokers. [Matthias Rieker, MoneyBeat]
Modeling the Financial Logic for Facebook’s Huge Deal
For mere mortals who haven’t partaken in whatever Kool-Aid Mark Zuckerberg is serving at Facebook Inc (NASDAQ:FB)’s Hacker Way headquarters, is there any way to justify the $19 billion ($16 billion, plus $3 billion in restricted stock units that vest in four years) it is paying for WhatsApp? [Peter Thal Larsen and Rob Cox, DealBook] Related; This week, I was at the Tuck School of Business at Dartmouth, talking about the difference between price and value. I built the presentation around two points that I have made in my posts before. [Aswath Damodaran, Musing on Markets]
An After-Hours Arbitrage Opportunity: $50k to $760k in 12 years?
During 2002-2012 (2,769 trading days) stock prices adjusted slowly in response to public news in after-hours trading. 5,881 rule-based intra-day trading opportunities each offered an average return of 1.53% within less than 4 hours. [Wesley R. Gray, Turnkey Analyst]
May the Force Be with Tesla
All of this may seem obvious, but in the event it doesn’t: As long as Tesla Motors Inc (NASDAQ:TSLA) can forecast big production numbers, everything else is irrelevant. [Herb Greenberg, Herb on TheStreet]
Finding Safe Stocks in Battered Emerging Markets
Many emerging markets have had a rough start to 2014, owing to a toxic combination of continued tapering by the U.S. Federal Reserve and political crises at home. [David Turner, Institutional Investors]
Hottest Links: Not The Onion
Twix-Loving Man Fired for Attacking Twix-Withholding Vending Machine With Forklift
Here McKevitt’s account and the state records differ. McKevitt said he simply used the forklift to move the vending machine back in place against the wall. The state said McKevitt used the forklift to lift the vending machine up and then drop it on the floor “at least six times.” This earned him not one Twix bar (which, again, is actually two bars) but three! [Sara Morrison, The Wire]
